**Exhibit 10.16**

**Execution Version**

 

SECOND AMENDMENT

 

TO

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Among

 

LINN ENERGY, LLC

as Borrower,

 

BNP PARIBAS,

as Administrative Agent,

 

and

 

The Lenders Signatory Hereto

 

 

Effective as of January 31, 2008

 

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SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDMENT TO THIRD AMENDED ANDRESTATED CREDIT AGREEMENT (this “Second Amendment”) executedeffective as of January 31, 2008 (the “Second Amendment Effective Date”)is among LINN ENERGY, LLC, a limited liability company formed under the laws ofthe State of Delaware (the “Borrower”); each of the undersignedguarantors (the “Guarantors”, and together with the Borrower, the “Obligors”);each of the Lenders that is a signatory hereto; and BNP PARIBAS, asadministrative agent for the Lenders (in such capacity, together with itssuccessors, the “Administrative Agent”).

 

Recitals

 

A.            TheBorrower, the Administrative Agent and the Lenders are parties to that certainThird Amended and Restated Credit Agreement dated as of August 31, 2007(as amended by the First Amendment to Third Amended and Restated CreditAgreement, dated November 2, 2007, as the same has been further amended,supplemented or otherwise modified prior to the date hereof, the “CreditAgreement”), pursuant to which the Lenders have made certain creditavailable to and on behalf of the Borrower.

 

B.            TheBorrower has requested and the Administrative Agent and the Lenders have agreedto amend certain provisions of the Credit Agreement.

 

C.            NOW,THEREFORE, in consideration of the premises and the mutual covenants hereincontained, for good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.               Defined Terms.  Each capitalized term which is defined in theCredit Agreement, but which is not defined in this Second Amendment, shall havethe meaning ascribed to such term in the Credit Agreement.  Unless otherwise indicated, all sectionreferences in this Second Amendment refer to the Credit Agreement.  For purposes of this Second Amendment, thefollowing terms have the meanings specified below:

 

“Acquisition”means the acquisition of certain oil, gas and mineral Properties pursuant tothe terms and conditions of the Acquisition Documents.

 

“AcquisitionDocuments” means (a) the Purchase and Sale Agreement dated as of December 20,2007, by and between Lamamco Drilling Company, as seller and Linn EnergyHoldings, LLC, as buyer, and (b) all bills of sale, assignments,agreements, instruments and documents executed and delivered in connectiontherewith, as amended.

 

“AcquisitionProperties” means the Oil and Gas Properties and other properties describedin the Acquisition Documents.

 

Section 2.               Amendments to Credit Agreement.

 

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2.1           Definitions.  Section 1.02 is hereby amended by addingor amending and restating the following definitions:

 

“ ‘Agreement’ means this Third Amendedand Restated Credit Agreement, as amended by that certain First Amendment toThird Amended and Restated Credit Agreement, dated as of November 2, 2007,as amended by the Second Amendment, and as the same may from time to time befurther amended, modified, supplemented or restated.”

 

“ ‘Asset Sale’means, solely for purposes of Section 3.04(c), the sale, transfer or otherdisposition (by way of merger, casualty, condemnation or otherwise) by theBorrower or any of the Subsidiaries to any Person other than the Borrower orany Guarantor of (a) any Equity Interests in any of the Subsidiaries(including any such sale by the issuer of such Equity Interests but excludingdirectors’ qualifying shares) or (b) any other assets of the Borrower orany of the Subsidiaries (other than (x)(i) inventory (includingHydrocarbons), (ii) damaged, obsolete or worn out assets, scrap andequipment no longer used in the operations of the Borrower or any Subsidiary,and (iii) Investments permitted by Section 9.05, in each casedisposed of in the ordinary course of business and (y) any sale, transferor other disposition that, together with all related sales, transfers or otherdispositions, has a value not in excess of $25,000,000 in the aggregate).”

 

“ ‘FundedDebt’ means any Debt of the type described in clause (a), (e), (i) or (m) ofthe definition thereof other than Loans or the Second Lien Term Loan.”

 

“ ‘Intercreditor Agreement’ means inrespect of the Second Lien Term Loan Agreement, that certain IntercreditorAgreement dated as of the Second Amendment Effective Date entered into by andamong the Administrative Agent, the Second Lien Term Loan Administrative Agent,the Borrower and the Guarantors, as the same may from time to time be amended,modified, supplemented or restated.”

 

“ ‘NetCash Proceeds’ means (a) in connection with any issuance or sale ofEquity Interests, Debt securities, Casualty Events or the incurrence of Debt,the cash proceeds received from such issuance or incurrence, net of attorneys’fees, investment banking fees, accountants’ fees, underwriting discounts andcommissions and other customary fees and expenses actually incurred inconnection therewith; and (b) in connection with any Asset Sale, the cashproceeds thereof (including cash proceeds subsequently received (as and whenreceived) in respect of noncash consideration initially received), netof (i) selling and other expenses (including reasonable broker’s fees orcommissions, legal fees, transfer and similar taxes, and the Borrower’s goodfaith estimate of income taxes actually paid or payable in connection with suchsale), (ii) amounts provided as a reserve, in accordance with GAAP,against any liabilities under any indemnification obligations or purchase priceadjustment associated with such Asset Sale (*provided* that,to the extent and at the time any such amounts are released from such reserve,such amounts shall constitute Net Cash Proceeds) and (iii) any amountpayable in 

 

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respectof any Debt for borrowed money which is secured by the asset sold in such AssetSale and which is required to be repaid with such proceeds (excluding any suchDebt assumed by the purchaser of such asset).”

 

“‘Permitted Refinancing Debt’ means Debt (for purposes of thisdefinition, “new Debt”) incurred in exchange for, or proceeds of whichare used to refinance, all of the Second Lien Term Loan or any PermittedRefinancing Debt theretofore incurred (as applicable, the “Refinanced Debt”);provided that (a) such new Debt is in an aggregate principal amount not inexcess of $400,000,000; (b) such new Debt has a stated maturity no earlierthan the day 365 days after August 1, 2010; and (c) such new Debt(and any guarantees thereof) is subordinated in right of payment to theIndebtedness (or, if applicable, the Guaranty Agreement) to at least the sameextent as the Refinanced Debt or is otherwise subordinated on terms reasonablysatisfactory to the Administrative Agent.”

 

“‘Second Amendment’ means the Second Amendment to Third Amended andRestated Credit Agreement, dated as of January 31, 2008, among theBorrower, the Guarantors, the Administrative Agent and each Lender partythereto.”

 

“‘Second Amendment Effective Date’ has the meaning assigned to such termin the Second Amendment.”

 

“‘Second Lien Term Loan Administrative Agent’ means BNP Paribas, asadministrative agent for the lenders under the Second Lien Term Loan Agreement(in such capacity, together with its successors and assigns).”

 

“‘Second Lien Term Loan Agreement’ means that certain Second Lien TermLoan Agreement, dated as of January 31, 2008, by and among the Borrower,the several lenders from time to time parties thereto, and the Second Lien TermLoan Administrative Agent, as the same shall be amended, supplemented orotherwise modified from time to time in accordance with Section 12.02thereof and Section 9.04(b).”

 

“‘Second Lien Term Loan’ means any Debt incurred pursuant to Section 9.02(j) andall Debt and other obligations under the Second Lien Term Loan Documents.”

 

“‘Second Lien Term Loan Documents’ means the Second Lien Term LoanAgreement and the other Loan Documents (as defined in the Second Lien Term LoanAgreement) as the same shall be amended, supplemented or otherwise modifiedfrom time to time in accordance with Section 9.04(b).”

 

“‘Second Lien Term Loan Notes’ means the notes from time to time issuedunder the Second Lien Term Loan Agreement.”

 

2.2           Section 2.07.

 

(a)           The first sentence of Section 2.07(a) ishereby amended and restated as follows:

 

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“For the period from and including the Second Amendment Effective Dateto but excluding April 1, 2008, the amount of the Borrowing Base and theConforming Borrowing Base shall be $1,900,000,000.”

 

(b)           Section 2.07(e) is herebyamended and restated as follows:

 

“(e)         Reduction of the Borrowing Base UponIssuance of Funded Debt. Notwithstanding anything to the contrary contained herein, upon theissuance of any Funded Debt (excluding Permitted Refinancing Debt), theBorrowing Base then in effect shall be reduced by an amount equal to theproduct of 0.25 multiplied by the stated principal amount of such Debt(excluding any original issue discount), and the Borrowing Base as so reducedshall become the new Borrowing Base immediately upon the date of such issuance,effective and applicable to the Borrower, the Agents, each Issuing Bank and theLenders on such date until the next redetermination or modification thereofhereunder.”

 

2.3           Section 3.04.

 

(a)  Section 3.04(c)(iv) is hereby amended and restatedas follows:

 

“(iv)        If, at any time after the EffectiveDate, the Borrower issues additional Funded Debt and any Borrowing BaseDeficiency exists, then the Borrower shall (a) use 100% of the Net CashProceeds from the issuance of such Funded Debt to prepay the Borrowings in anaggregate principal amount equal to such excess, and (b) if, as a resultof an LC Exposure, any Borrowing Base Deficiency remains after prepaying all ofthe Borrowings, deposit with the Administrative Agent on behalf of the Lendersan amount equal to the lesser of such LC Exposure and any remaining Net CashProceeds to be held as cash collateral as provided in Section 2.08(j).  The Borrower shall be obligated to make suchprepayment and/or deposit of cash collateral as soon as practicable and in anyevent no later than the Business Day after it or any Subsidiary receives suchNet Cash Proceeds as a result of such issuance of Funded Debt.”

 

(b)  Section 3.04(c) is hereby amended by adding thefollowing subsection 3.04(c)(vii):

 

“(vii)       If there is less than$350,000,000 in availability under this Agreement after giving effect to anyadjustment to the Borrowing Base pursuant to Section 9.12, then theBorrower shall (A) use 100% of the Net Cash Proceeds from any Asset Saleto prepay the Borrowings until there is at least $350,000,000 in availabilityunder this Agreement after giving effect to any adjustments to the BorrowingBase pursuant to Section 9.12 and (B) if, as a result of an LCExposure, any Borrowing Base Deficiency remains after prepaying all of theBorrowings, deposit with the Administrative Agent on behalf of the Lenders anamount equal to the lesser of such LC Exposure and any remaining Net CashProceeds to be held as cash collateral as provided in Section 2.08(j).  The Borrower shall be obligated to make suchprepayment and/or deposit of cash collateral as soon as practicable and in anyevent no later than the Business Day after it or any Subsidiary receives suchNet 

 

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Cash Proceeds as a result of such Asset Sale.”

 

(c)  Section 3.04(c) is hereby amended by adding thefollowing subsection 3.04(c)(viii):

 

“(viii)      Ifnot otherwise required as prepayments by this Section 3.04 (includingpayments required within 90 days pursuant to Section 3.04(c)(ii)), theBorrower shall use 100% of the Net Cash Proceeds of any Equity Interests orFunded Debt to prepay the Second Lien Term Loans.”

 

2.4           Article VII.  Article VII is hereby amended by addinga Section 7.24 to read in its entirety as follows:

 

“Section 7.24  SpecifiedSenior Indebtedness.

 

The Indebtedness of the Borrower constitutes “SeniorIndebtedness” as defined in the Intercreditor Agreement.”

 

2.5           Section 8.14.  Section 8.14 is hereby amended by addinga subsection “(c)” to read in its entirety as follows:

 

“(c)         Prior to orcontemporaneously with the granting of any Lien on any Property to or for thebenefit of any agent or lender under the Second Lien Term Loan Agreementpursuant to any Second Lien Term Loan Document or otherwise, the Borrower orapplicable Subsidiary shall grant to the Administrative Agent a first priorityLien interest (subject only to Excepted Liens of the type described in clauses (a) to(d) and (f) in the definition thereof, but subject to the provisos atthe end of such definition) on such Property for the benefit of the Lenders tosecure the Indebtedness.  All such Liensin favor of the Administrative Agent will be created and perfected by and inaccordance with the provisions of deeds of trust, security agreements andfinancing statements or other Security Instruments, all in form and substancereasonably satisfactory to the Administrative Agent and in a sufficient numberof executed (and acknowledged where necessary or appropriate) counterparts forrecording purposes.  In order to complywith the foregoing, if any Subsidiary places a Lien on its Oil and GasProperties and such Subsidiary is not a Guarantor, then it shall become aGuarantor and comply with Section 8.14(b).”

 

2.6           Article VIII.  Article VIII is hereby amended by addingthe following Section 8.18:

 

“Section 8.18.  Additional Swap Agreements.  Within 30 days of the Second AmendmentEffective Date, the Borrower shall enter into Swap Agreements withrespect to the Acquisition Properties for volumes and prices satisfactory tothe Administrative Agent and the Borrower shall neither assign, terminate orunwind any such Swap Agreements nor sell any Swap Agreements if the effect ofsuch action (when taken together with any other Swap Agreements executedcontemporaneously with the taking of such action) would have the effect ofcanceling its positions under such Swap Agreements required hereby.”

 

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2.7           Section 9.02.  Section 9.02 is hereby amended by addingsubsections “(j)” and “(k)” to read as follows:

 

“(j)          Debt incurred by theBorrower pursuant to the Second Lien Term Loan Agreement and/or the PermittedRefinancing Debt in respect thereof and any guarantees thereof by any of theGuarantors; provided that, without the prior written consent of all of theLenders, (i) the aggregate principal amount of such Debt shall not exceed$400,000,000, (ii) the maturity date of any Permitted Refinancing Debtshall be no earlier than 365 days after August 1, 2010, (iii) suchDebt and the holders thereof shall at all times be subject to the IntercreditorAgreement, and (iv) such Debt has no amortization.”

 

“(k)         Extensions, renewalsor replacements of any Debt (for purposes of this paragraph (k), “refinancingdebt”) permitted in clauses (a) through (i) so long as (i) theprincipal amount (or accreted value, if applicable) of such refinancing debtdoes not exceed the principal amount (or accreted value, if applicable) of theDebt extended, renewed or replaced (plus all accrued interest on the Debt andthe amount of all expenses and premiums incurred in connection therewith), (ii) suchrefinancing debt has a final maturity date later than the final maturity dateof the Debt being extended, renewed or replaced, (iii) if the Debt beingextended, renewed or replaced is subordinated in right of payment to theobligations under this Agreement, such refinancing debt has a final maturitydate equal to or later than the final maturity date of, and is subordinated inright of payment to, the obligations under this Agreement on terms at least asfavorable to the Lenders as those contained in the documentation governing theDebt being extended, renewed or replaced, (iv) such refinancing debt isincurred either by the Borrower or by a Subsidiary who is the obligor on theDebt being extended, renewed or replaced, and (v) if incurred by theBorrower, such refinancing debt may be guaranteed by the Guarantors.

 

2.8           Section 9.03.  Section 9.03 is hereby amended byamending and restating subsection (f) in its entirety and addingsubsections “(g)” and “(h)” to read as follows:

 

“(f)          Liens on Property not constitutingcollateral for the Indebtedness and not otherwise permitted by the foregoingclauses of this Section 9.03; provided that the aggregate principal orface amount of all Debt secured under this Section 9.03(f) shall notexceed $10,000,000 at any time.”

 

“(g)         Liens securing theobligations of the Borrower and the Guarantors under the Second Lien Term LoanAgreement and the other Second Lien Term Loan Documents; provided that, suchLiens shall not encumber any Property that is not subject to a first priorityLien in favor of, or for the benefit of, the Lenders to secure the Indebtednessas required by Section 8.14.”

 

“(h)         Extensions, renewalsor replacements of any of the Liens permitted in clauses (a) through (g) solong as (i) the principal amount of the Debt or obligation 

 

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secured thereby is no greater than the principal amount of such Debt orobligation at the time such Lien was permitted hereunder except for increasesin an amount equal to a reasonable premium or other reasonable amount paid, andfees and expenses reasonably incurred, in connection with such extension,renewal, refinancing, or replacement and in an amount equal to any existingcommitments unutilized thereunder, (ii) any such extension, renewal orreplacement Lien is limited to the property originally encumbered thereby, and (iii) anyrenewal or extension of the Debt or obligations secured or benefited thereby ispermitted by Section 9.02.”

 

2.9           Section 9.04(b).  Section 9.04(b) is hereby deletedand restated in its entirety to read as follows:

 

“(b)         Redemption orRepayment of Subordinated Debt.  TheBorrower will not, and will not permit any Subsidiary to: (i) call, makeor offer to make any Redemption of or otherwise Redeem (whether optional ormandatory and whether in whole or in part) or repay any subordinated Debtpermitted to be incurred hereunder, including the Second Lien Term Loan, exceptwith the proceeds of Asset Sales, Casualty Events or Funded Debt, or theproceeds of the sale or issuance of Equity Interests or Permitted RefinancingDebt, in each case, in accordance with Section 3.04; (ii) amend,modify, waive or otherwise change, consent or agree to any amendment,modification, waiver or other change to, any of the terms of any notesevidencing any subordinated Debt permitted hereunder, including the Second LienTerm Loan, or any indenture, agreement, instrument, certificate or otherdocument relating to any subordinated Debt permitted hereunder (including theSecond Lien Term Loan Agreement, any Second Lien Term Loan Document and anyother document or agreement relating thereto) if (A) the effect of suchamendment, modification or waiver is to shorten the final maturity, except aspermitted under Section 9.02(h) or in accordance with the definitionof Permitted Refinancing Debt, or increase the amount of any payment ofprincipal thereof or increase the rate or shorten any period for payment ofinterest thereon or modify the method of calculating the interest rate, (B) suchaction adds covenants, events of default or other agreements to the extent morerestrictive than those contained in this Agreement, or (C) such actionadds collateral unless the Loan Documents are being amended at the same time toreflect such new collateral, provided that the foregoing shall not prohibit theexecution of supplemental agreements in connection with the issuance ofPermitted Refinancing Debt or the addition of guarantors if required by theterms thereof; and (iii) designate any Debt (other than obligations of theBorrower and the Subsidiaries pursuant to the Loan Documents) as “SpecifiedSenior Indebtedness” or “Specified Guarantor Senior Indebtedness” or give anysuch other Debt any other similar designation for the purposes of anyindentures or other documents relating to any subordinated Debt permittedhereunder, including the Second Lien Term Loan.”

 

2.10         Section 9.07.  Section 9.07 is hereby amended andrestated as follows:

 

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“Section 9.07 Limitation on Leases.  Neither the Borrower nor any of itsSubsidiaries will create, incur, assume or suffer to exist any obligation for thepayment of rent or hire of Property of any kind whatsoever (real or personalbut excluding Capital Leases permitted by Section 9.02(g), leases ofHydrocarbon Interests and drilling and other similar contracts), under leasesor lease agreements which would cause the aggregate amount of all payments madeby the Borrower and its Subsidiaries pursuant to all such leases or leaseagreements, including, without limitation, any residual payments at the end ofany lease, to exceed $10,000,000 in any period of twelve consecutive calendarmonths during the life of such leases.”

 

2.11         Section 9.12.  Section 9.12(d)(iii) is herebyamended and restated as follows:

 

“(iii) if such other sale or disposition of Oil and Gas Propertyor Subsidiary owning Oil and Gas Properties included in the most recentlydelivered Reserve Report during any period between two successive ScheduledRedetermination Dates has a fair market value (as determined by theAdministrative Agent), individually or in the aggregate, in excess of $25,000,000(or, if the Second Lien Term Loan Agreement has been terminated, $50,000,000),the Borrowing Base shall be reduced, effective immediately upon such sale ordisposition, by an amount equal to the value, if any, assigned such Property asdetermined in good faith by the Supermajority Lenders assigned such Property inthe most recently delivered Reserve Report and”

 

2.12         Section 9.16.  The first parenthetical in Section 9.16 ishereby amended and restated in its entirety as follows:

 

“(other than this Agreement, the Security Instruments or the SecondLien Term Loan Documents)”

 

2.13         Section 10.01.  Section 10.01 is hereby amended byadding a subsection “(o)” to read in its entirety as follows:

 

“(o)         the Intercreditor Agreement, afterdelivery thereof shall for any reason, except to the extent permitted by theterms thereof, cease to be in full force and effect and valid, binding andenforceable in accordance with its terms against the Borrower or any partythereto or holder of the Debt subordinated thereby or shall be repudiated byany of them, or cause the payment of the obligations of the Second Lien TermLoan Notes to be senior or pari passu in right to the payment of obligations ofthis Agreement, or the Borrower or any Guarantor shall make any payment inviolation of the terms of the Intercreditor Agreement.”

 

2.14         Section 11.08(b).  Section 11.08(b) is hereby deletedand replaced in its entirety to read as follows:

 

“(b)         The Lendersacknowledge that the Administrative Agent and the Arrangers 

 

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are acting solely in administrativecapacities with respect to the structuring and syndication of this facility andhave no duties, responsibilities or liabilities under this Agreement and theother Loan Documents other than their administrative duties, responsibilitiesand liabilities specifically as set forth in the Loan Documents and in theircapacity as Lenders hereunder.  Instructuring, arranging or syndicating this facility, each Lender acknowledgesthat the Administrative Agent and/or Arrangers may be agents or lenders underthese Notes, the Second Lien Term Loan Notes, other loans or other securitiesand waives any existing or future conflicts of interest associated with theirrole in such other debt instruments.  Ifin its administration of this facility or any other debt instrument, theAdministrative Agent determines (or is given written notice by any Lender) thata conflict exists, then it shall eliminate such conflict within 90 days orresign pursuant to Section 11.06 and shall have no liability for actiontaken or not taken, other than actions taken or not taken which representAdministrative Agent’s gross negligence or willful misconduct, while suchconflict existed.”

 

2.15         Section 12.01.  Section 12.01(a)(i) and (ii) arehereby amended and restated in their entirety as follows:

 
|   | (i)    |                                | “if  to the Borrower, to it at |
|--------|--------|-------------------------------------|-------------------------------------|
|   |   |                                |
|   |   | Linn  Energy, LLC                   |
|   |   | 600 Travis  Street, Suite 5100 |
|   |   | Houston, TX  77002                  |
|   |   |                                |
|   |   | Attention:  Kolja Rockov            |
|   |   | Telephone:  281-840-4169            |
|   |   | Fax:  281-840-4189                  |
|   |   | E-Mail:  kr@linnenergy.com          |
|   |   |                                |
|   |   | with a copy  to:                    |
|   |   |                                |
|   |   | Linn  Energy, LLC                   |
|   |   | 600 Travis  Street, Suite 5100 |
|   |   | Houston, TX  77002                  |
|   |   |                                |
|   |   | Attention:  Charlene A. Ripley      |
|   |   | Telephone:  281-840-4119            |
|   |   | Fax:  281-840-4180                  |
|   |   | E-mail:  cripley@linnenergy.com     |

 

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|   | (ii)   |                                         | if  to the Administrative Agent, to it at |
|--------|--------|----------------------------------------------|-------------------------------------------|
|   |   |                                         |
|   |   | 525 Washington Blvd., 8th  floor             |
|   |   | Jersey City, New Jersey 07310                |
|   |   | Attention: Dina Wilson, Loan  Assistant      |
|   |   | Telecopy: 201-850-4020                       |
|   |   |                                         |
|   |   | with a copy  to the Administrative Agent at: |
|   |   |                                         |
|   |   | 1200 Smith  Street, Suite 3100          |
|   |   | Houston,  Texas 77002                        |
|   |   | Attention:  Betsy Jocher                     |
|   |   | Telecopy:  713-659-6915”                |

 

2.16         Annex I.  Annex I is hereby amended and restated in isentirety as shown on the attached Annex I.

 

2.17         Schedule 7.14.  Schedule 7.14 is hereby amended and restatedin its entirety as shown on the attached Schedule 7.14.

 

Section 3.               ConditionsPrecedent.  The effectiveness of thisSecond Amendment is subject to the receipt by the Administrative Agent of thefollowing documents and satisfaction of the other conditions provided in this Section 3,each of which shall be reasonably satisfactory to the Administrative Agent inform and substance:

 

3.1           Payment by theBorrower to the Administrative Agent of all fees and other amounts due andpayable on or prior to the Second Amendment Effective Date, including, to theextent invoiced, reimbursement or payment of all out-of-pocket expensesrequired to be reimbursed or paid by the Borrower.

 

3.2           The AdministrativeAgent shall have received multiple counterparts as requested of this SecondAmendment from all of the Lenders.

 

3.3           TheAdministrative Agent shall have received an Intercreditor Agreement executed bythe Second Lien Term Loan Administrative Agent and the Borrower.

 

3.4           No Default or Eventof Default shall have occurred and be continuing as of the Second AmendmentEffective Date.

 

3.5           TheAdministrative Agent or its counsel shall have received (a) a certificateof a Responsible Officer of the Borrower certifying: (i) that the Borroweris concurrently consummating the Acquisition in accordance with the terms ofthe Acquisition Documents (with all of the material conditions precedentthereto having been satisfied in all material respects by the parties thereto)and acquiring substantially all of the Acquisition Properties contemplated bythe Acquisition Documents; (ii) as to the final purchase price for theAcquisition Properties after giving effect to all adjustments as of the closingdate contemplated by the Acquisition Documents and specifying, by category, theamount of such adjustment, provided that the final purchase price 

 

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shallnot be greater than $600,000,000, subject to pre-closing and post-closingadjustments under the Acquisition Documents; (iii) that attached theretois a true and complete list of the Acquisition Properties which have beenexcluded from the Acquisition pursuant to the terms of the AcquisitionDocuments, specifying with respect thereto the basis of exclusion as (A) titledefect, (B) preferential purchase right, (C) environmental or (D) casualtyloss; (iv) that attached thereto is a true and complete list of allAcquisition Properties for which any seller has elected to cure a title defect,(v) that attached thereto is a true and complete list of all AcquisitionProperties for which any seller has elected to remediate an adverseenvironmental condition, (vi) there was no known breach of the seller’stitle or environmental representations in the Acquisition Documents that wouldhave a material adverse effect on the Acquisition Properties, taken as a whole,and (vii) that attached thereto is a true and complete list of allAcquisition Properties which are currently pending final decision by a thirdparty regarding purchase of such property in accordance with any preferentialright; (b) a true and complete executed copy of each of the AcquisitionDocuments; (c) original counterparts or copies, certified as true and complete,of the assignments, deeds and leases for all of the Acquisition Properties; and(d) such other related documents and information as the AdministrativeAgent shall have reasonably requested.

 

3.6           TheAdministrative Agent shall have received an opinion of (i) Akin GumpStrauss Hauer Feld LLP, special counsel to the Borrower, in form and substancesatisfactory to the Administrative Agent, as to such matters incident to theTransactions as the Administrative Agent may reasonably request and (ii) localcounsel in each of the following states: West Virginia, Pennsylvania, Texas,Oklahoma and California and any other jurisdictions requested by theAdministrative Agent, in form and substance satisfactory to the AdministrativeAgent.

 

3.7           TheAdministrative Agent shall have received a certificate of the Borrower and ofeach Guarantor setting forth (a) resolutions of the Managers, board ofdirectors or other managing body with respect to the authorization of theBorrower or such Guarantor to execute and deliver the Second Amendment andrelated documents to which it is a party and to enter into the transactionscontemplated in those documents, (b) the individuals (i) who areauthorized to sign the Loan Documents to which the Borrower or such Guarantoris a party and (ii) who will, until replaced by another individual dulyauthorized for that purpose, act as its representative for the purposes ofsigning documents and giving notices and other communications in connectionwith this Agreement and the other Loan Documents to which it is a party, (c) specimensignatures of such authorized individuals, and (d) that the articles orcertificate of incorporation or formation and bylaws, operating agreement orpartnership agreement, as applicable, of the Borrower and each Guarantor, ineach case, are certified as not being amended since last delivered to theAdministrative Agent.  The AdministrativeAgent and the Lenders may conclusively rely on such certificate until theAdministrative Agent receives notice in writing from the Borrower to thecontrary.

 

3.8           TheAdministrative Agent shall have received from each party thereto duly executedcounterparts (in such number as may be requested by the Administrative Agent)of the Security Instruments described on Exhibit A.  After giving effect to the execution anddelivery of the Security Instruments, the Borrower shall be in compliance with Section 8.14(a).

 

3.9           TheAdministrative Agent shall be reasonably satisfied with the environmentalcondition of the Acquisition Properties.

 

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3.10         TheAdministrative Agent shall have received duly executed Notes payable to theorder of each Lender who has requested a Note in a principal amount equal toits new Aggregate Maximum Credit Amount dated as of the date hereof.

 

3.11         TheAdministrative Agent shall have received such other documents as theAdministrative Agent or special counsel to the Administrative Agent mayreasonably request.

 

TheAdministrative Agent shall notify the Borrower and the Lenders of the SecondAmendment Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, theobligations of the Lenders to make Loans and of each Issuing Bank to issueLetters of Credit pursuant to this Second Amendment shall not become effectiveunless each of the foregoing conditions is satisfied (or waived pursuant to Section 12.02)at or prior to 1:00 p.m., Houston time, on February 1, 2008 (and, inthe event such conditions are not so satisfied or waived, the Commitments shallterminate at such time).

 

Section 4.               Representationsand Warranties; Etc.  Each Obligorhereby affirms:  (a) that as of thedate of execution and delivery of this Second Amendment, all of therepresentations and warranties contained in each Loan Document to which suchObligor is a party are true and correct in all material respects as though madeon and as of the Second Amendment Effective Date (unless made as of a specificearlier date, in which case, was true as of such date); and (b) that aftergiving effect to this Second Amendment and to the transactions contemplatedhereby, no Defaults exist under the Loan Documents or will exist under the LoanDocuments.

 

Section 5.               Miscellaneous.

 

5.1           Confirmation.  The provisions of the Credit Agreement (asamended by this Second Amendment) shall remain in full force and effect inaccordance with its terms following the effectiveness of this Second Amendment.

 

5.2           Ratification andAffirmation of Obligors.  Each of theObligors hereby expressly (i) acknowledges the terms of this SecondAmendment, (ii) ratifies and affirms its obligations under the GuarantyAgreement and the other Security Instruments to which it is a party, (iii) acknowledges,renews and extends its continued liability under the Guaranty Agreement and theother Security Instruments to which it is a party and agrees that its guaranteeunder the Guarantee Agreement and the other Security Instruments to which it isa party remains in full force and effect with respect to the Indebtedness asamended hereby.

 

5.3           Counterparts.  This Second Amendment may be executed by oneor more of the parties hereto in any number of separate counterparts, and allof such counterparts taken together shall be deemed to constitute one and thesame instrument.

 

5.4           No Oral Agreement.  THIS WRITTEN SECOND AMENDMENT, THE CREDITAGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH ANDTHEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORALAGREEMENTS OF THE PARTIES.  THERE ARE NOSUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

 

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5.5           Governing Law.  THIS SECOND AMENDMENT (INCLUDING, BUT NOTLIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

 

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IN WITNESS WHEREOF, the parties hereto have caused this SecondAmendment to be duly executed effective as of the date first written above.

 

 
| **BORROWER**: | ** ** | **LINN ENERGY, LLC** |
|---------------|------------|----------------------|

 

 
|   | By:    |   /s/  Kolja Rockov           |   |
|--------|--------|-----------------------------------------|--------|
|   |   | Kolja  Rockov, Executive Vice President |   |
|   |   | and Chief  Financial Officer            |   |

 
| **GUARANTORS:** | ** ** | **LINN ENERGY HOLDINGS, LLC**          |
|-----------------|------------|----------------------------------------|
|            |       |                                   |
|            |       | **LINN OPERATING, INC.**               |
|            |       |                                   |
|            |       | **PENN WEST PIPELINE, LLC**            |
|            |       |                                   |
|            |       | **MID ATLANTIC WELL SERVICE, INC.**    |
|            |       |                                   |
|            |       | **MID-CONTINENT HOLDINGS I, LLC**      |
|            |       |                                   |
|            |       | **MID-CONTINENT HOLDINGS II, LLC**     |
|            |       |                                   |
|            |       | **MID-CONTINENT I, LLC**               |
|            |       |                                   |
|            |       | **MID-CONTINENT II, LLC**              |
|            |       |                                   |
|            |       | **LINN GAS MARKETING, LLC**            |
|            |       |                                   |
|            |       | **LINN EXPLORATION MIDCONTINENT, LLC** |

 

 
|   | By:                                 | /s/ Kolja  Rockov |   |
|--------|-------------------------------------|-------------------|--------|
|   | Kolja Rockov                        |
|   | Executive  Vice President and Chief |
|   | Financial  Officer                  |

 

SecondAmendment

 

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|   | **BNP PARIBAS**, as  Administrative Agent and a  Lender |
|--------|---------------------------------------------------------|
|   |                                                    |   |
|   |                                                    |   |
|   | By:                                                     | /s/ Douglas  R. Liftman |   |
|   | Name:                                                   | /s/  Douglas R. Liftman |
|   | Title:                                                  | Managing  Director |
|   |                                                    |   |
|   |                                                    |   |
|   | By:                                                     | /s/ Betsy  Jocher |   |
|   | Name:                                                   | Betsy  Jocher |
|   | Title:                                                  | Director |

 

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|   | **ROYAL BANK OF CANADA,**as  Syndication  Agent and a Lender |
|--------|--------------------------------------------------------------|
|   |                                                         |   |   |
|   |                                                         |   |   |
|   | By:                                                          | /s/ Don J.  McKinnerney |   |
|   | Name:                                                        | Don  J. McKinnerney |
|   | Title:                                                       | Authorized  Signatory |

 

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|   | **SOCIETE GENERALE,**as  a Co-Documentation  Agent and a Lender |
|--------|-----------------------------------------------------------------|
|   |                                                            |   |   |
|   |                                                            |   |   |
|   | By:                                                             | /s/ Elena  Robciuc |   |
|   | Name:                                                           | Elena  Robciuc |
|   | Title:                                                          | Director |

 

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|   | **COMERICA BANK,**as a  Lender |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/ Huma  Manal |   |
|   | Name:                          | Huma  Manal |
|   | Title:                         | Vice  President |

 

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|   | **FORTIS CAPITAL CORP.,**as  a Lender |
|--------|---------------------------------------|
|   |                                  |   |
|   |                                  |   |
|   | By:                                   | /s/ David  Montgomery |   |
|   | Name:                                 | David  Montgomery |
|   | Title:                                | Director |
|   |                                  |   |
|   |                                  |   |
|   | By:                                   | /s/ Deirdre  Sanbom |   |
|   | Name:                                 | Deirdre  Sanbom |
|   | Title:                                | Director |

 

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|   | **CITIBANK, NA,**as a  Co-Documentation Agent  and a Lender |
|--------|-------------------------------------------------------------|
|   |                                                        |   |
|   |                                                        |   |
|   | By:                                                         | /s/ David  E. Hunt |   |
|   | Name:                                                       | David  E. Hunt |
|   | Title:                                                      | Vice  President |

 

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|   | **KEYBANK NATIONAL ASSOCIATION,**as  a  Lender |
|--------|------------------------------------------------|
|   |                                           |   |
|   |                                           |   |
|   | By:                                            | /s/ Thomas  Rajan |   |
|   | Name:                                          | Thomas  Rajan |
|   | Title:                                         | Director |

 

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|   | **WACHOVIA BANK, N.A.**,  as a Lender |
|--------|---------------------------------------|
|   |                                  |   |
|   |                                  |   |
|   | By:                                   | /s/ Leanne  S. Phillips |   |
|   | Name:                                 | Leanne  S. Phillips |
|   | Title:                                | Director |

 

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|   | **BMO CAPITAL MARKETS FINANCING,  INC.**, as a Co-Documentation Agent  and a Lender |
|--------|-------------------------------------------------------------------------------------|
|   |                                                                                |   |
|   |                                                                                |   |
|   | By:                                                                                 | /s/ James  V. Ducote |   |
|   | Name:                                                                               | James  V. Ducote |
|   | Title:                                                                              | Director |

 

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|   | **CREDIT SUISSE**, as  a Lender |
|--------|---------------------------------|
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ Vanessa  Gomez |   |
|   | Name:                           | Vanessa  Gomez |
|   | Title:                          | Director |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/  Morenikeji Ajayi |   |
|   | Name:                           | Morenikeji  Ajayi |
|   | Title:                          | Associate |
|        |                                 |  |  |  |

 

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|   | **COMPASS BANK**, as  a Lender |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/ Murray  E. Brasseux |   |
|   | Name:                          | Murray  E. Brasseux |
|   | Title:                         | Executive  Vice President |

 

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|   | **DnB NOR BANK ASA**,  as a Lender |
|--------|------------------------------------|
|   |                               |   |
|   |                               |   |
|   | By:                                | /s/ Philip  F. Kurpiewski |   |
|   | Name:                              | Philip  F. Kurpiewski |
|   | Title:                             | Senior  Vice President |
|   |                               |   |
|   |                               |   |
|   | By:                                | /s/ Jack  Sun |   |
|   | Name:                              | Jack  Sun |
|   | Title:                             | First  Vice President |
|        |                                    |  |  |  |

 

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|   | **DZ BANK AG, DEUTSCHE ZENTRAL-  GENOSSENSCHAFTSBANK, FRANKFURT  AM MAIN, NEW YORK BRANCH**,  as a Lender |
|--------|-----------------------------------------------------------------------------------------------------------|
|   |                                                                                                      |   |
|   |                                                                                                      |   |
|   | By:                                                                                                       | /s/ Scott  B. Lamoreaux |   |
|   | Name:                                                                                                     | Scott  B. Lamoreaux |
|   | Title:                                                                                                    | First  Vice President |
|   |                                                                                                      |   |
|   |                                                                                                      |   |
|   | By:                                                                                                       | /s/ Paul J.  Bowles |   |
|   | Name:                                                                                                     | Paul  J. Bowles |
|   | Title:                                                                                                    | Assistant  Treasurer |

 

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|   | **GUARANTY BANK, FSB**,  as a Lender |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  | /s/ W.  David McCarver IV |   |
|   | Name:                                | W.  David McCarver IV |
|   | Title:                               | Vice  President |

 

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|   | **LEHMAN BROTHERS COMMERCIAL  BANK**, as a Lender |
|--------|---------------------------------------------------|
|   |                                              |   |
|   |                                              |   |
|   | By:                                               | /s/ Brian  McNany |   |
|   | Name:                                             | Brian  McNany |
|   | Title:                                            | Authorized  Signatory |

 

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|   | **JPMORGAN CHASE BANK, N.A.**,  as a Lender |
|--------|---------------------------------------------|
|   | ** **                                  |
|   |                                        |   |
|   | By:                                         | /s/ Michael  A. Kamauf |
|   | Name:                                       | Michael  A. Kamauf |
|   | Title:                                      | Vice  President |

 

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|   | **THE ROYAL BANK OF SCOTLAND plc**,  as a |
|--------|-------------------------------------------|
|   | Lender                                    |
|   |                                      |
|   |                                      |   |
|   | By:                                       | /s/ Mark  Lumpkin, Jr. |
|   | Name:                                     | Mark  Lumpkin, Jr. |
|   | Title:                                    | Vice  President |

 

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|   | **RZB FINANCE LLC**, as  a Lender |
|--------|-----------------------------------|
|   | ** **                        |
|   |                              |   |
|   | By:                               | /s/ Shirley  Ritch |
|   | Name:                             | Shirley  Ritch |
|   | Title:                            | Assistant  Vice President |
|   |                              |   |
|   |                              |   |
|   | By:                               | /s/ John A.  Valiska |
|   | Name:                             | John  A. Valiska |
|   | Title:                            | First  Vice President |

 

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|   | **UNION BANK OF CALIFORNIA, N.A.**,  as a  Lender |
|--------|---------------------------------------------------|
|   | ** **                                        |
|   |                                              |   |
|   | By:                                               | /s/ Scott  Gildea |
|   | Name:                                             | Scott  Gildea |
|   | Title:                                            | Vice  President |

 

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|   | **U.S. BANK NATIONAL ASSOCIATION**,  as a  Lender |
|--------|---------------------------------------------------|
|   | ** **                                        |
|   |                                              |   |
|   | By:                                               | /s/ Justin  M. Alexander |
|   | Name:                                             | Justin  M. Alexander |
|   | Title:                                            | Vice  President |

 

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|   | **CALYON NEW YORK BRANCH**,  as a Lender |
|--------|------------------------------------------|
|   | ** **                               |
|   |                                     |   |
|   | By:                                      | /s/  Page Dillehunt |
|   | Name:                                    | Page Dillehunt |
|   | Title:                                   | Managing  Director |
|   |                                     |   |
|   |                                     |   |
|   | By:                                      | /s/ Sharada  Manne |
|   | Name:                                    | Sharada  Manne |
|   | Title:                                   | Vice  President |

 

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|   | **THE BANK OF NOVA SCOTIA**,  as a Lender |
|--------|-------------------------------------------|
|   | ** **                                |
|   |                                      |   |
|   | By:                                       | /s/ David  Mills |
|   | Name:                                     | David  Mills |
|   | Title:                                    | Director |

 

 

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|   | **DEUTSCHE BANK TRUST COMPANY  AMERICAS**, as a  Lender |
|--------|---------------------------------------------------------|
|   | ** **                                              |
|   |                                                    |   |
|   | By:                                                     | /s/ Susan  LeFevre |
|   | Name:                                                   | Susan  LeFevre |
|   | Title:                                                  | Director |
|   |                                                    |   |
|   |                                                    |   |
|   | By:                                                     | /s/ Erin  Morrissey |
|   | Name:                                                   | Erin  Morrissey |
|   | Title:                                                  | Vice  President |

 

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|   | **ALLIED IRISH BANKS P.L.C.**,  as a Lender |
|--------|---------------------------------------------|
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/ David  O’Driscoll |
|   | Name:                                       | David  O’Driscoll |
|   | Title:                                      | Assistant  Vice President |
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/ Aidan  Lanigan |
|   | Name:                                       | Aidan  Lanigan |
|   | Title:                                      | Vice  President |

 

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|   | **WESTLB AG, NEW YORK BRANCH**,  as a  Lender |
|--------|-----------------------------------------------|
|   | ** **                                    |
|   |                                          |   |
|   | By:                                           | /s/  Dominick D’Ascoli |
|   | Name:                                         | Dominick  D’Ascoli |
|   | Title:                                        | Director |
|   |                                          |   |
|   |                                          |   |
|   | By:                                           | /s/  Jennifer King |
|   | Name:                                         | Jennifer  King |
|   | Title:                                        | Director |

 

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|   | **SUNTRUST BANK**, as  a Lender |
|--------|---------------------------------|
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ Peter  Panos |
|   | Name:                           | Peter  Panos |
|   | Title:                          | Vice  President |

 

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